IDA Ireland is preparing its next five-year plan following a period of successes for foreign direct investment in Ireland.
Releasing its annual report for 2019, IDA Ireland has revealed that almost a quarter of a million people are directly employed in the multinational sector in Ireland – an all-time high for the sector.
In total in 2019, 21,844 new jobs were created across 250 projects from foreign direct investment (FDI) companies in Ireland. With job losses measuring 7,977, this resulted in a net jobs growth of 13,867 in 2019, representing a slight decrease on 2018’s net growth of 14,040 jobs.
‘IDA Ireland clients now account directly for 10.5pc of national employment’
– MARTIN SHANAHAN
Overall, employment in the multinational sector reached a record 245,096 last year. “The record level of employment represents a strong vote of confidence in our economy by international investors,” said Minister for Business, Enterprise and Innovation Heather Humphreys, TD.
“It demonstrates too that Ireland’s economic strengths – particularly our first-class workforce and pro-enterprise policy environment – remain highly attractive to multinational companies.”
Noting employment growth across all regions and sectors, IDA Ireland CEO Martin Shanahan said: “Employment growth in 2019 was 6pc compared to 2.4pc nationally and IDA Ireland clients now account directly for 10.5pc of national employment.”
Capital expenditure from the multinational sector in Ireland rose by 8pc in 2019 to €5.9bn, the majority of which came from life sciences and technology companies.
The numbers working in R&D specifically rose 11pc to 18,834.
Shanahan said expenditure by IDA clients in the wider Irish economy totalled €21.5bn and FDI exports were also seen to increase by 14pc to €218.7bn, accounting for 68pc of national exports.
Five years of FDI
The 2019 report coincides with the end of a five-year strategy for IDA Ireland for the period 2015 to 2019. “Over the lifetime of our current strategy we have won 1,209 investments in total; 562 of which are new name investments, 400 were expansions by established companies and 247 were RD&I investments, an uplift of 134pc on our target and resulting in 112,327 jobs being created,” said Shanahan.
‘One-third of MNCs have been here for 20 years now, with others operating successfully for 25, 30 and more years’
– MARTIN SHANAHAN
New name investments also accounted for 125 of investments won in 2019, which Shanahan spoke to as evidence of “continued confidence in Ireland’s investment proposition as a stable and reliable location for global investors”.
As well as new investors, Ireland has seen continued expansions from established FDI companies in recent years and Shanahan highlighted this “considerable commitment” to the country.
“Indeed, longevity, resilience and commitment are the hallmark of multinational companies in Ireland. One-third of MNCs have been here for 20 years now, with others operating successfully for 25, 30 and more years,” he said.
FDI coming from the US is still the leader, with 63pc of 2019’s investments coming from this single source. Investment from other countries grew from 30pc in 2014 to 37pc in 2019.
Regional development strategy
IDA also highlighted its successes in regional development – something that Minister Humphreys was also keen to focus on at Enterprise Ireland’s annual report announcement yesterday (7 January).
This comes as Fianna Fail TD Aindrias Moynihan accused the Government of “anti-rural communities bias” regarding IDA site visits, with 42pc of visits in almost two years taking place outside Dublin.
After Dublin, major urban centres such as Cork, Galway and Limerick saw the glut of the remaining reported site visits, with counties Roscommon, Longford, Monaghan, Wexford and Wicklow seeing less than 1pc of overall activity.
According to the IDA, in the period since 2015, regional investments increased by more than 50pc. “The Government has made regional development an absolute priority and that commitment has produced real results,” said Humphreys. “We now have more people employed by IDA companies outside Dublin than ever before. Our focus in the coming period will be growing those numbers even further and ensuring that the benefits of FDI continue to be felt right across the country.”
Over the last five-year period, Shanahan said 75,635 jobs were created outside of Dublin. In 2019, the regions saw 110 investments creating 5,368 net jobs.
“Every region hit the five-year strategy targets of a 30pc uplift in investment we set out to achieve and three regions – the mid-west, mid-east and south-east – exceeded 40pc of targets.”
‘We now have more people employed by IDA companies outside Dublin than ever before. Our focus in the coming period will be growing those numbers even further’
– HEATHER HUMPHREYS, TD
Part of the IDA strategy involved addressing a shortage of available suitable property for investment outside the capital city. This included a regional capital investment programme to deliver 11 advance building solutions – either technological or office buildings – on IDA lands in a number of regional locations across Ireland, including Limerick, Sligo, Castlebar, Carlow, Tralee, Waterford, Galway, Athlone and Dundalk. Nine of these developments have been completed to date and seven are currently occupied or at an advanced stage of leasing.
The second phase of this property strategy will involve a further 11 business projects and a number of medium and large-scale infrastructure projects. Six of these building projects are scheduled to commence in 2020.
In total, the IDA currently has 36 business and technology parks and 12 strategic sites across the country. Its most recent site acquisition measures more than 80 hectares in Newbridge, Co Kildare.
Significant challenges ahead
A new strategy for the period from 2020 to 2024 is being finalised and is expected to be announced soon.
Looking to the year ahead, both Humphreys and Shanahan were bullish in their outlook even in the face of oncoming international economic challenges.
“The FDI performance over the past five years has been unprecedented. My expectation is that this strong performance will continue into the first half of 2020,” said Shanahan. He did, however, concede “significant downside risk in the marketplace” in this coming period.
“Those risks emanate from the possibility of an economic correction in key source markets, continued trade tensions, subdued global economic growth and from domestic challenges related to competitiveness and the carrying capacity of the economy. We have developed our new strategy to, as far as possible, withstand the challenges of global political and economic uncertainty.
“Our value proposition continues to be strong, we are well positioned as a gateway location to Europe and are committed members of the EU. We are business-friendly and supportive. Talent continues to be an important asset. Being competitive is more important than ever for our client companies to continue to grow and develop and as Ireland expands its footprint across the globe, seeking out new markets to win investment.”
While significant economic impacts are still expected, Brexit has presented opportunities for Ireland with the IDA seeing close to 90 Brexit-related investments since the UK’s EU referendum in 2016.
According to EY, Dublin has been a popular choice for the relocation of financial firms in response to Brexit, with 28 firms committed to making the move here since June 2016, ahead of Frankfurt (21), Luxembourg (19) and Paris (18). EY’s research indicates this is driven by factors such as trade, technology and tax.